SCHUMER: SERVICEMEMBERS FROM UPSTATE NY ARE AT RISK OF ABUSIVE FINANCIAL PRACTICES WHEN DEPLOYED OVERSEAS; FED REPORT FOUND FINANCIAL INSTITUTIONS FAILED TO ABIDE BY CURRENT LAW MORE THAN 15,000 TIMES, SUCH AS FORECLOSING ON MORTGAGES OR REPOSSESSING CARS; SCHUMER BILL WILL BETTER PROTECT SERVICEMEMBERS & REIN-IN ABUSE
The Consumer Financial Protection Bureau Currently Lacks The Authority To Supervise & Enforce Protections For Servicemembers; Feds Have So Far Been Inconsistent In Enforcing Existing Protections
New Schumer Bill, the Military Consumer Protection Act, Will Give the CFPB – Our Nation’s Premier Consumer Watchdog – the Jurisdiction to Enforce Protections For Upstate NY Soldiers
Schumer: Our Soldiers Protect Us Overseas, So We Should Protect Them At Home
Today, on a conference call with reporters, U.S. Senator Charles E. Schumer will launch his first push to pass the Military Consumer Protection Act. Currently, members of the military from Upstate New York are at risk of abusive financial practices while they are deployed overseas, in remote areas like Iraq or Afghanistan, because current regulators are failing to sufficiently enforce protections for service members against evictions, mortgage foreclosures, vehicle repossession and credit default while they are deployed.
In 2014 alone, the Office of Servicemember Affairs within the Consumer Financial Protection Bureau (CFPB) saw more than 17,000 complaints from servicemembers and their families. These complaints from servicemembers included those who claimed that financial institutions had violated their rights under the Servicemember Civil Relief Act (SCRA) while they were on active duty. As a result, Schumer introduced legislation with Senator Jack Reed that would expand the CFPB’s authority and would consequently allow it to better protect our military servicemembers from abusive financial practices. If passed, the Military Consumer Protection Act would authorize the Consumer Financial Protection Bureau (CFPB) to oversee and enforce compliance with certain existing provisions of the Servicemember Civil Relief Act (SCRA). While the SCRA was designed to ease financial burdens on service members during periods of military service, enforcement of the law has been inconsistent. Schumer’s bill would ensure that enforcement of the SCRA’s protections will be a permanent priority for the CFPB.
“When our men and women in uniform come home, we should be welcoming them with a huge ‘thank you’ – not a huge bill or a notice of eviction posted on their front door. We must do more to protect our military from unlawful seizures of property and predatory practices that can destroy their finances while they’re overseas fighting for our country. The men and women who fight to keep our country safe deserve an agency that is clearly dedicated and responsible for upholding the protections of the SCRA and willing to enforce penalties on those that do not, and that agency is the CFBP. Strengthening the CFBP’s ability to enforce protections for former and current servicemembers and their families is an important step in our efforts to safeguard our soldier’s financial well-being,” said Senator Schumer.
Schumer pointed to several recent news reports of servicemembers returning home to find they had been victimized by unlawful financial abuse. For example, earlier this month, several military veterans sued Bank of America for charging them more than $5 million in excessive interest rates while they served in Iraq. The New York Times reported on an Army National Guard Sergeant named Charles Beard who, while on duty in Tikrit, had his car repossessed by an auto loan company.
The SCRA currently protects against these abusive financial practices: it prohibits military members from being evicted from rental or mortgaged property while serving overseas, and ensures interest is capped at 6% on debts incurred prior to entering active military duty. These provisions ensure that military families are properly protected during the member’s service.
However, despite current SCRA protections, numerous reports indicate they are not being properly enforced. A July 2012 report from the Government Accountability Office (GAO) stated that in 2010, only 26% of financial institutions were examined to ensure compliance of SCRA provisions. Further, the GAO reported that in 2007, 4 percent of all financial institutions were reviewed to ensure that they were upholding the SCRA’s protections for military members and their families. Schumer said these reports were unacceptable and demanded full compliance and enforcement.
Schumer’s legislation, the Military Consumer Protection Act, would allow our nation’s primary consumer watchdog, the Consumer Financial Protection Bureau (CFPB) to better protect servicemembers when they experience a credit event while serving overseas by providing the CFPB with supervision and enforcement authority. Schumer said the CFBP’s Office of Servicemember Affairs is well positioned to take on this additional authority and is more than capable of ensuring compliance, supervision and enforcement, after this bill is passed because it already has the expertise when it comes to assisting the members of our military.
Schumer said this bill would establish a financial regulator directly responsible for enforcement of key aspects of the SCRA. Schumer said the SCRA was designed to include provisions that protect servicemembers while they are on active duty, and while it has done a great job, responsibility for enforcement of the law’s protections is disjointed. For example, Schumer explained that, right now, both the Department of Justice (DOJ) and the Office of the Comptroller of the Currency (OCC) are most often tasked with taking up claims from servicemembers experiencing abuse from financial institutions, but both have different specialties and do not have the same specialties as the CFBP’s Office of Servicemember Affairs.
Schumer said Upstate New York has a high number of men and women serving on bases throughout the state that could be at risk of financial abuse and therefore protected by this legislation:
- In the Capital Region, there are 1,744 Active Duty Service Members, 1,803 National Guardsmen, and 2,753 Reservists.
- In Central New York, there are 76 Active Duty Service Members, 1,031 National Guardsmen, and 2,485 Reservists.
- In Western New York, there are 33 Active Duty Service Members, 1,411 National Guardsmen, and 2,597 Reservists.
- In the Rochester-Finger Lakes, there are 861 National Guardsmen.
- In the Southern Tier, there are 616 National Guardsmen.
- In the Hudson Valley, there are 1,835 Active Duty Service Members, 1,685 National Guardsmen, and 2,220 Reservists
- In the North Country, there are 17,373 Active Duty Service Members, 511 National Guardsmen, and 491 Reservists.
Schumer is an original cosponsor of the Military Consumer Protection Act, along with Senator Jack Reed (D-RI). Other cosponsors of the legislation include Elizabeth Warren (D-MA), Mark Warner (D-VA), Jeff Merkley (D-OR), Richard Blumenthal (D-CT), Al Franken (D-MN), Dick Durbin (D-IL), Tim Kaine (D-VA), Bob Menendez (D-NJ), and Mazie Hirono (D-HI). In addition, this bill is supported by military organizations including the Consumer Federation of America; the National Guard Association of the United States; the National Association of Consumer Advocates; the National Military Family Association; the Military Officers Association of America; and U.S. PIRG.